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    California Builders Right To Repair Current Law Summary:

    Current Law Summary: SB800 (codified as Civil Code §§895, et seq) is the most far-reaching, complex law regulating construction defect litigation, right to repair, warranty obligations and maintenance requirements transference in the country. In essence, to afford protection against frivolous lawsuits, builders shall do all the following:A homeowner is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the homeowner by the builder and product manufacturers, as well as commonly accepted maintenance practices. A failure by a homeowner to follow these obligations, schedules, and practices may subject the homeowner to the affirmative defenses.A builder, under the principles of comparative fault pertaining to affirmative defenses, may be excused, in whole or in part, from any obligation, damage, loss, or liability if the builder can demonstrate any of the following affirmative defenses in response to a claimed violation:


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    Building Industry Association Southern California - Desert Chapter
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    77570 Springfield Ln Ste E
    Palm Desert, CA 92211
    http://www.desertchapter.com

    Building Industry Association Southern California - Riverside County Chapter
    Local # 0532
    3891 11th St Ste 312
    Riverside, CA 92501


    Building Industry Association Southern California
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    Irvine, CA 92614
    http://www.biasc.org

    Building Industry Association Southern California - Orange County Chapter
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    17744 Skypark Cir Ste 170
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    http://www.biaoc.com

    Building Industry Association Southern California - Baldy View Chapter
    Local # 0532
    8711 Monroe Ct Ste B
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    http://www.biabuild.com

    Building Industry Association Southern California - LA/Ventura Chapter
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    Construction Expert Witness News and Information
    For Anaheim California

    Nevada Senate Rejects Construction Defect Bill

    Pennsylvania Court Extends Construction Defect Protections to Subsequent Buyers

    Another Las Vegas Tower at the Center of Construction Defect Claims

    Colorado “property damage” caused by an “occurrence” and exclusions j(5) and j(6) “that particular part”

    Construction Case Alert: Appellate Court Confirms Engineer’s Duty to Defend Developer Arises Upon Tender of Indemnity Claim

    Des Moines Home Builders Building for Habitat for Humanity

    Florida Contractor on Trial for Bribing School Official

    Is Construction Heading Off the Fiscal Cliff?

    Condo Buyers Seek to Void Sale over Construction Defect Lawsuit

    Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii

    Court Grants Summary Judgment to Insurer in HVAC Defect Case

    Florida trigger

    Contractor Sues Supplier over Defective Products

    Construction Defect Claim Did Not Harm Homeowner, Court Rules

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    Seven Former North San Diego County Landfills are Leaking Contaminants

    Workers Hurt in Casino Floor Collapse

    A Call to Washington: Online Permitting Saves Money and the Environment

    Homeowner may pursue negligence claim for construction defect, Oregon Supreme Court holds

    Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship

    Texas covered versus uncovered allocation and “legally obligated to pay.”

    Plaintiffs In Construction Defect Cases to Recover For Emotional Damages?

    Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

    Insurance Company Must Show that Lead Came from Building Materials

    Home Repair Firms Sued for Fraud

    Boyfriend Pleads Guilty in Las Vegas Construction Defect Scam Suicide

    The Montrose Language Interpreted: How Many Policies Are Implicated By A Construction Defect That Later Causes a Flood?

    Texas Windstorm Insurance Agency Under Scrutiny

    Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.

    California Supreme Court Binds Homeowner Associations To Arbitration Provisions In CC&Rs

    Builder to Appeal Razing of Harmon Tower

    No Coverage for Construction Defects Under Alabama Law

    Construction Delayed by Discovery of Bones

    Contractors Admit Involvement in Kickbacks

    Nevada Budget Remains at Impasse over Construction Defect Law

    Going Green for Lower Permit Fees

    AFL-CIO Joins in $10 Billion Infrastructure Plan

    Can Negligent Contractors Shift Blame in South Carolina?

    Badly Constructed Masonry Walls Not an Occurrence in Arkansas Law

    The King of Construction Defect Scams

    $5 Million Construction Defect Lawsuit over Oregon Townhomes

    Federal Judge Dismisses Insurance Coverage Lawsuit In Construction Defect Case

    Construction Law: Unexpected, Fascinating, Bizarre

    Remodels Replace Construction in Redding

    Good Signs for Housing Market in 2013

    Construction Defects in Home a Breach of Contract

    Lockton Expands Construction and Design Team

    New Web Site Tracks Settled Construction Defect Claims

    Construction Defect Journal Seeks Article Submissions Regarding SB800 and Other Builders Right to Repair Laws

    Appropriation Bill Cuts Military Construction Spending

    Faulty Workmanship Causing Damage to Other Property Covered as Construction Defect

    Plans Go High Tech

    Contractor Liable for Soils Settlement in Construction Defect Suit

    South Carolina Contractors Regain General Liability Coverage

    Court Consolidates Cases and Fees in Soil Construction Defect Case

    Denver Court Rules that Condo Owners Must Follow Arbitration Agreement

    Virginia Chinese Drywall “property damage” caused by an “occurrence” and number of “occurrences”

    Nevada Supreme Court Reverses Decision against Grader in Drainage Case

    Insurer Not Entitled to Summary Judgment on Construction Defect Claims

    Delaware “occurrence” and exclusions j(5) and j(6)

    Condo Board May Be Negligent for not Filing Construction Defect Suit in a Timely Fashion

    Are Construction Defects Covered by Your General Liability Policy?

    Federal District Court Continues to Find Construction Defects do Not Arise From An Occurrence

    BHA Expands Construction Experts Group

    Statutes of Limitations May be the Colorado Contractors’ Friend

    Building Inspector Jailed for Taking Bribes

    Homeowners Must Comply with Arbitration over Construction Defects

    The Flood Insurance Reform Act May be Extended to 2016

    Wisconsin “property damage” caused by an “occurrence.”

    CC&Rs Not the Place for Arbitration Agreement, Court Rules

    Supreme Court of Oregon Affirms Decision in Abraham v. T. Henry Construction, et al.

    The Colorado Court of Appeals Rules that a Statutory Notice of Claim Triggers an Insurer’s Duty to Defend.

    Construction Defect Lawsuits? There’s an App for That

    Cleveland Condo Board Says Construction Defects Caused Leaks

    Arizona Contractor Designs Water-Repellant Cabinets

    Ohio Court Finds No Coverage for Construction Defect Claims

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    No Resulting Loss From Deck Collapsing Due to Rot

    Safer Schools Rendered Unsafe Due to Construction Defects

    Construction on the Rise in Washington Town

    Can We Compel Insurers To Cover Construction Defect in General Liability Policies?

    Anti-Assignment Provision Unenforceable in Kentucky

    Fifth Circuit Asks Texas Supreme Court to Clarify Construction Defect Decision

    Background Owner of Property Cannot Be Compelled to Arbitrate Construction Defects

    Avoid Gaps in Construction Defect Coverage

    Fire Reveals Defects, Appeals Court Affirms Judgment against Builder

    Former Zurich Executive to Head Willis North America Construction Insurance Group

    After $15 Million Settlement, Association Gets $7.7 Million From Additional Subcontractor

    Another Guilty Plea in Las Vegas HOA Scandal
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    ANAHEIM CALIFORNIA CONSTRUCTION EXPERT WITNESS
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    The Anaheim, California Construction Expert Witness Group at BHA, leverages from the experience gained through more than 5,500 construction related expert witness designations encompassing a wide spectrum of construction related disputes. Drawing from this considerable body of experience, BHA provides construction related trial support and expert services to Anaheim's most recognized construction litigation practitioners, commercial general liability carriers, owners, construction practice groups, as well as a variety of state and local government agencies.

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    Seller Cannot Compel Arbitration for Its Role in Construction Defect Case<

    March 1, 2012 — CDJ Staff

    The buyer of a leaky home in Venice, California cannot be compelled to arbitration with the seller in a construction defect lawsuit, according to a decision in Lindemann v. Hume, which was heard in the California Court of Appeals. Lindemann was the trustee of the Schlei Trust which bought the home and then sued the seller and the builder for construction defects.

    The initial owner was the Hancock Park Trust, a real estate trust for Nicholas Cage. Richard Hume was the trustee. In 2002, Cage agreed to buy the home which was being built by the Lee Group. Cage transferred the agreement to the Hancock Park Trust. Hancock had Richard Nazarin, a general contractor, conduct a pre-closing walk through. They also engaged an inspector. Before escrow closed, the Lee Group agreed to provide a ten-year warranty “to remedy and repair any and all damage resulting from water infiltration, intrusion, or flooding due to the fact that the door on the second and third floors of the residence at the Property were not originally installed at least one-half inch (1/2”) to one inch (1”) above the adjacent outside patio tile/floor on each of the second and third floors.”

    Cage moved in and experienced water intrusion and flooding. The Lee Group was unable to fix the problems. Hume listed the home for sale. The Kamienowiczs went as far as escrow before backing out of the purchase over concerns about water, after the seller’s agent disclosed “a problem with the drainage system that is currently being addressed by the Lee Group.”

    The house was subsequently bought by the Schlei Trust. The purchase agreement included an arbitration clause which included an agreement that “any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration.” The warranty the Lee Group had given to Hancock was transferred to the Schlei trust and Mr. Schlei moved into the home in May 2003.

    Lindemann enquired as to whether the work done would prevent future flooding. Nazarin sent Schlei a letter that said that measures had been taken “to prevent that situation from recurring.” In February, 2004, there was flooding and water intrusion. Lindemann filed a lawsuit against the Lee Group and then added the Hancock Park defendants.

    The Hancock Park defendants invoked the arbitration clause, arguing that Lindemann’s claims “were only tangentially related to her construction defect causes of action against the Lee Group.” On June 9, 2010, the trial court rejected this claim, ruling that there was a possibility of conflicting rulings on common issues of law. “With respect to both the developer defendants and the seller defendants, the threshold issue is whether there was a problem with the construction of the property in the first instance. If there was no problem with the construction of the property, then there was nothing to fail to disclose.” Later in the ruling, the trial court noted that “the jury could find there was no construction defect on the property, while the arbitration finds there was a construction defect, the sellers knew about it, and the sellers failed to disclose it.” The appeals court noted that while Hancock Park had disclosed the drainage problems to the Kamienowiczs, no such disclosure was made to Sclei.

    The appeals court described Hancock Park’s argument that there is no risk of inconsistent rulings as “without merit.” The appeals court said that the issue “is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered.” Further, the court noted that “the Hancock Park defendants and the Lee Group have filed cross-complaints for indemnification against each other, further increasing the risk of inconsistent rulings.”

    The court found for Lindemann, awarding her costs.

    Read the court’s decision…


    Five Years of Great Legal Blogging at Insurance Law Hawaii

    December 9, 2011 — CDJ Staff

    Our congratulations to Tred Eyerly who has been blogging at Insurance Law Hawaii for five years now. Over the years, he has posted more than five hundred posts and has provided us all with fascinating insights into the laws on insurance coverage. He describes his blog as “a commentary on insurance coverage issues in Hawaii and beyond.” We are grateful that the “beyond” has just in the last few weeks included Colorado, Illinois, Washington, Minnesota, and Rhode Island (about as far from the island of Hawaii as you can get).

    You can read his blog at Insurance Law Hawaii.


    No Third-Quarter Gain for Construction

    November 18, 2011 — CDJ Staff

    The Associated Builders and Contractors released their analysis of construction work under contract and found that there was no increase in construction backlog from the second quarter of 2011. There was still improvement, however, over 2010, as the third quarter backlog is 16.3 percent higher than that of a year ago.

    The current backlog is 8.1 months, which according to Anirban Basu, the chief economist of the ABC, “is consistent with flat construction spending.” He noted that less than 8 months indicated a decline.

    Read the full story…


    Association May Not Make Claim Against Builder in Vermont Construction Defect Case

    October 23, 2012 — CDJ Staff

    The Vermont Supreme Court issued a ruling on September 28 on Long Trail House Condominium Association. The case was heard by a panel of two Supreme Court justices, Marilyn Skoglund and Brian Burgess, and three justices specially assigned for the case, Kupersmith, Davenport, and Johnson. The decision came down with a 3-2 split; Judges Kupersmith and Johnson joining in a dissent.

    In the underlying case, Stratton Corporation entered into an agreement with Engelberth Construction in which Engelberth would supply “recommendations on construction feasibility, consultation as to the selection of materials and equipment, assistance with zoning requirements and permits, and cooperation with the ‘design team’ to provide valuable engineering services.” Engelberth was not responsible to determine that the drawings and specifications were in accordance with the law and building codes, nor were they responsible “for the design team’s designs, errors, or omissions.”

    Subsequent to the agreement was a construction project which culminated in the incorporation of the Long Trail House Condominium Association. The condominium owners initiated a lawsuit over alleged defects. Stratton, Intrawest, and the association settled claims for $7,025,00 with Stratton and Intrawest both pursuing claims against Engelberth. This case is still unsettled.

    The association progressed on remediation, which cost about $1,500,00 more than was provided by the settlement, and so the association also sued Engelberth. In this case, the court granted a summary judgment to Engelberth, concluding that negligence claim was barred both “by the economic loss rule and that the absence of contractual privity was fatal to the warranty claims.”

    The court upheld both determinations of the lower court. The court noted that “the economic loss rule ‘prohibits recovery in tort for purely economic losses’” and that “in tort law, duties are imposed by law to protect the public from harm.” A negligence claim could only be supported with evidence of “some accompanying physical harm, which does not include economic loss.”

    The association made the claim that the economic loss rule applies only when there is a contractual relationship between the two parties. The court rejected this argument, citing a reference that “economic interests are protected, if at all, by contract principles, rather than tort principles.”

    Nor did the court find it persuasive that a “professional services” exception to the economic loss doctrine applied, noting that the court has rejected this notion in two prior cases. The noted that the association’s losses were purely economic, and their inability to settle those claims with Engelberth did not mean that they had not means of settling them, as they were able to settle these very claims with Stratton and Intrawest.

    The association also raised claims of an implied warranty, resting on the construction contract between Engelberth and Stratton. This was also rejected by the court, noting that Vermont “case law plainly contemplates the existence of contractual privity before a breach of implied warranty claim can be raised.” The court noted that there was neither a contract nor a sale between Engelberth and the association, and thus there were no grounds for an implied warranty. The court concluded that “the Association’s warranty remedy lies against the entity that sold it the condominium units and implicitly warranted through the sale that the units were built in a good and workmanlike manner and that they were suitable for habitation.”

    Read the court’s decision …


    Ohio Court of Appeals Affirms Judgment in Landis v. Fannin Builders

    April 20, 2011 — April 20, 2011 Beverley BevenFlorez - Construction Defect Journal

    The Ohio Court of Appeals affirmed the judgment in Landis v. William Fannin Builders. Landis contracted Fannin Builders to build their home. The case involved staining problems on the T1-11 siding chosen by the plaintiffs.

    After a year and a half of discussion on how to resolve the problem of uneven staining on the siding, Landis filed suit “against Fannin Builders, alleging claims for breach of contract, breach of the express limited warranty, and violation of the Ohio Consumer Sales Practices Act (“OCSPA”). Fannin Builders, in turn, filed a third-party complaint against 84 Lumber, alleging claims for breach of contract and indemnification. With the trial court’s leave, Fannin Builders also later amended its answer to add a counterclaim against appellees for breach of contract and unjust enrichment. In the counterclaim, Fannin Builders alleged that appellees still owed it $3,908.98 for the construction of appellees’ home.”

    “In its decision, the trial court found in appellees’ favor on their breach of contract claim and against appellees on their claims for breach of the express limited warranty and violation of the OCSPA. Additionally, the trial court found in Fannin Builders’ favor on its counterclaim for breach of contract and against Fannin Builders on its third-party claims for breach of contract and indemnity. The trial court determined that appellees’ damages amounted to $66,906.24, and after setting off the $3,908.98 that appellees owed Fannin Builders under the construction contract, the trial court awarded appellees $62,997.26. The trial court reduced its decision to judgment on May 18, 2010.”

    Fannin Builders appealed this judgment and assigned the following errors:

    [1.] The Trial Court Erred as a Matter of Law by Concluding that Appellant Breached its Contract with Appellees when it provided a Semi-Transparent Oil-Based Stain that Simply did not Meet their Approval.

    [a.] The Contract does not Contain a Satisfaction Clause.

    [b.] Even if the Court Implies a Satisfaction Clause, the Court Should Apply an Objective Standard.

    [2.] The Trial Court Erred as a Matter of Law by Failing to Consider Appellant’s Right to Cure.

    [3.] The Trial Court committed Reversible Error by not Assessing Damages Using “Diminished Value Standard,” and by Creating a Remedy that Constitutes Economic Waste.

    [4.] The Trial Court Erred as a Matter of Law by Concluding that Appellant is Barred from Seeking Indemnification When 84 [Lumber] Never Fulfilled its Obligations Pursuant to the Settlement Agreement Entered on August 2, 2005.

    In response to the first assigned error, the Court of Appeals stated: “Because the failure to provide siding of a uniform color, not appellees’ displeasure, breached the contract, we reject Fannin Builders’ contention that the trial court implied a satisfaction clause into the contract and found a breach of that clause. Accordingly, we overrule Fannin Builders’ first assignment of error.”

    The Court of Appeals overruled the second assignment of error and provided the following reasoning: “Although Fannin Builders depends upon a term of the limited warranty for its right to cure, the trial court concluded that no breach of the limited warranty occurred. Fannin Builders breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIA’s Quality Standards. Consequently, the limited warranty does not apply to this case, and thus, it does not prevent appellees’ recovery of damages.”

    The Appeals Court found “the trial court’s award of damages” was “both reasonable and supported by competent, credible evidence,” and therefore concluded “that the trial court did not err in setting appellees’ damages at $62,997.26.” The Fannin Builders third assignment of error was overruled.

    The fourth and final assignment of error was also overruled by the Court of Appeals. “While Fannin Builders correctly asserts that 84 Lumber never installed the replacement siding, it ignores the fact that it ordered 84 Lumber to remove the replacement siding from appellees’ property. Thus, Fannin Builders precluded 84 Lumber from completely performing under the August 2, 2005 letter agreement. […] Consequently, Fannin Builders cannot now claim that the letter agreement is unenforceable or that it is entitled to indemnification from 84 Lumber. Because Fannin Builders assumed all liability for the defective siding in the letter agreement, it is responsible for appellees’ damages.”

    James A. Zitesman, Columbus, Ohio Business Attorney, compared the case to Jones v. Centex (Ohio App. 2010), which had a different verdict:

    “The common thread is the implied warranty of good workmanship. In the Jones case, the Court found that the buyers had in fact waived all implied warranties, including the implied warranty of good workmanship. In the contract between Jones and Centex, the builder stated that it “…would not sell the property to Purchasers without this waiver.” Probably should have been a sign to the buyers.

    In the Landis case, the Court stated, “Contracts for the future construction of a residence include a duty, implied by law, that the builder must perform its work in a workmanlike manner.” The Court gave significant weight to the concept of the implied warranty of good workmanship. The builder relied upon the BIA Warranty which limits builders’ liability and exposure to legal issues. The trial court concluded there was no breach of the limited warranty, rather the builder “breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIAs Quality Standards.”

    The Supreme Court of Ohio has accepted the Jones v. Centex Homes case for review.

    Read the full story...


    Lower Court “Eminently Reasonable” but Wrong in Construction Defect Case

    July 10, 2012 — CDJ Staff

    Noting that “circuit court’s orders are eminently reasonable, logical and just” the Supreme Court of Appeals of West Virginia has granted a writ to halt enforcement of these orders and to compel arbitration instead in the case of State v. Tucker. The initial case concerned claims that an HVAC system had been improperly designed, constructed, manufactured, or maintained, leading to serious problems. Glenmark Holding, the owner of the Suncrest Executive Plaza brought a lawsuit against seven defendants. Three of the defendants, Morgan Keller, Inc, York International Corporation, and Johnson Controls, Inc. argued that Glenmark was obligated to enter into arbitration.

    Glenmark and the other defendants argued that the motions for arbitration should be denied “so all the claims and cross-claims of the parties could be litigated in one forum, in one proceeding.” The circuit court noted that arbitration is preferred over litigation because of its supposed “expeditious, economic resolution of issues,” but that in this case, “the petitioners would expend additional, not fewer resources responding to the parties’ claims and cross-claims.” As “compulsory arbitration would be insufficient and inequitable” the court denied the request, finding the arbitration clauses “unconscionable and, therefore, unenforceable.”

    Morgan Keller, York, and Johson argued that “the interpretation of arbitration clauses is governed exclusively by the Federal Arbitration Act.” The appeals court found that “the circuit court was within its authority to consider Glenmark’s claim that the arbitration clauses were unenforceable.” However, the appeals court rejected the circuit court’s conclusion about the “piecemeal” resolution of the conflict, as it contradicts a Supreme Court ruling. The Supreme Court stated in 1983 that the FAA “requires piecemeal resolution when necessary to give effect to an arbitration agreement.” In a 1985 decision, the Court held that a court could “not substitute [its] own views of economy and efficiency.”

    Nor could the court find the arbitration clause to be unconscionable or unenforceable. The court noted that the contract was a standard AIA form, and was amended by the parties involved, whom the court characterized as “commercially sophisticated.” The court found that the agreement limited the rights of all parties and was not one-sided.

    As the arbitration clause was neither unconscionable nor unenforceable, and Supreme Court rulings preclude a court from substituting its own procedures, even when these are “eminently reasonable, logical and just,” the appeals court halted the order of the circuit court, sending the matter to arbitration.

    Read the court’s decision…


    Defense for Additional Insured Not Barred By Sole Negligence Provision

    August 11, 2011 — Tred Eyerly, Insurance Law Hawaii

    A general contractor was entitled to a defense as an additional insured when the underlying complaint did not allege it was solely negligent. A-1 Roofing Co. v. Navigators Ins. Co., 2011 Ill. App. LEXIS 656 (Ill. Ct. App. June 24, 2011).

    A-1 was the general contractor for a roof resurfacing job at a high school. Jack Frost Iron Works Inc. (“Frost”) was one of A-1’s subcontractors. Frost had a CGL policy with Navigators Insurance Company under which A-1 was an additional insured.

    An employee of Frost’s subcontractor Midwest Sheet Metal Inc. was killed at the job site when a boom-lift he was operating flipped over. The boom-lift had been leased by another Frost subcontractor, Bakes Steel Erectors, Inc. (BSE). The deceased's estate filed suit against A-1, BSE and two other defendants.

    Read the full story…

    Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com


    Does the New Jersey Right-To-Repair Law Omit Too Many Construction Defects?

    January 6, 2012 — CDJ Staff

    A post on the blog of Liberty Building Forensics Group find fault with the New Jersey Home Warranty and Builders’ Registration Act for not being stringent enough. The poster notes the coverage given under the bill. In the first year, builders are responsible to remedy faulty workmanship and materials and major structural defects. While other protections expire in the first or second year, there is a ten year coverage of major construction defects.

    The blogger finds fault with the exclusion New Jersey law places on these claims, arguing that “due to the stringent definition of ‘major construction defects,” the warranty affords no coverage unless the house is practically collapsing.” The bill excludes leaks, cracks, and mold, and further limits claims if the homeowner has failed to inform the builder or insurer of defects, failure to maintain the home, and alterations made by the homeowner.

    The intent of the New Jersey law is given as “requiring that newly constructed homes conform to certain construction and quality standards as well as to provide buyers of new homes with insurance-backed warranty protection in the event such standards are not met.” It’s argued in the piece that it instead serves to “strip homeowners of any meaningful means of recovery for discovered construction defects.”

    Read the full story…


    No-Show Contractor Can’t Hide from Construction Defect Claim

    June 19, 2012 — CDJ Staff

    The failure of R. J. Haas to produce documents or make himself available for deposition has worn out the patience of the US District Court in San Jose. Judge Howard Lloyd issued a ruling inProbuilders Specialty Ins. Co. v. Valley Corp. (N.D. Cal., 2012).

    Probuilders issued an insurance policy covering Haas for their work on the construction of a single-family home for Ty and Karen Levine. The Levines sued Haas for “shoddy and incomplete work.” Probuilders contends that Haas “made material misrepresentations with respect to verifying that the subcontractors had insurance.” Since November 2011, Haas has been without legal counsel in this matter.

    Despite Probuilder’s attempts, the court noted that “Hass any not provided any documents in response to the plaintiff’s three sets of requests for production of documents.” Haas also “has refused to make himself available for deposition.” Haas was first scheduled for deposition in September, 2011. Subsequently, Haas has rescheduled his deposition repeatedly, postponing it to January 4, then February 13, and then agreed to be deposed “before the then-scheduled March 15 mediation,” after which he said he would “be unavailable to be deposed before April.

    The court noted that although Haas “hay have had legitimate reasons for wishing to continue his deposition, such as illness and his attempt to retain new counsel,” however, the court concluded that “Haas has had ample time to retain new counsel and prepare for deposition.

    The court also found fault with Haas’s objections to certain terms in the Request for Admissions, among them “named,” “independent contractor,” and “work,” noting that Haas called these “vague and ambiguous.” The court called it “quibbling,” and noted that the federal courts disfavor this. Later in the decision, the court made it clear that Haas “is obligated under the Federal Rules of Civil Procedure to respond to discovery requests.” And concludes, “that he has apparently been seeking to retain new counsel for over five months does not give him license to ignore plaintiff’s discovery requests entirely.

    The court granted Probuilders the option of filing a motion for sanctions. Mr. Haas did not attend or participate.

    Read the court’s decision…


    A Lien Might Just Save Your Small Construction Business

    April 4, 2011 — Douglas Reiser in the Builders Counsel Blog

    Many owners incorrectly believe that payment to the general contractor gets the owner off the hook for payment to subcontractors and suppliers. This assumption sometimes fosters the irresponsible owner, who fails to ensure that everyone is getting paid. Fortunately for those contractors further down the contracting chain, this assumption is incorrect.

    Suppliers and subcontractors can file a lien to secure payment for their labor and materials. A filing party must offer proper notice (if applicable) and file an adequate and timely lien in the County where the work is performed. You can read our earlier posts on these topics by following this link.

    A lien notice and a lien put an owner on notice that your business has provided labor and/or materials for the improvement of the owner’s property (See RCW 60.04.031 for more info). If the owner fails to take care to ensure that your business is paid the law mandates that the owner may have to pay twice.

    Read the full story...

    Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com


    Manhattan Developer Breaks Ground on $520 Million Project

    November 18, 2011 — CDJ Staff

    Rebuilding an area of Midtown West that has been condemned for decades, the Gotham Organization has broken ground on a 1,200-unit project that will include housing for a variety of household incomes and a school. One unit of the project will be affordable housing for families of annual incomes up to $40,000. Another will be for middle-income households. Additionally, there will be a 31-story tower with 550 luxury units.

    The site CityBiz quotes Mayor Michael Bloomberg, as saying that the project “will grow our economy by creating 2,900 construction-related jobs.” The president of the Gotham Organization, David L. Picket notes that it will “create hundreds of new jobs, generate millions of dollars in revenue for the construction industry, contribute towards the building of a new primary, and provide homes to thousands of New Yorkers.”

    Read the full story…


    Appeals Court Reverses Summary Judgment over Defective Archway Construction

    February 10, 2012 — CDJ Staff

    A judge has ruled that a plaintiff can go forward with her suit that she was injured by a defective archway during a birthday party. A three-judge panel of the California Court of Appeals issued this ruling on January 23, 2012, in the case of Trujillo v. Cosio.

    Ms. Trujillo attended a birthday party at the home of Maria Cosio and Joel Verduzco. A piñata was hung between a tree and a brick archway. Ms. Trujillo went to get candy that had fallen from the piñata, during which the archway fell on her hand. Subsequent examination of the archway showed that it had not been “properly anchored to the supporting pillars to protect the arch from falling.”

    Ms. Cosio and Mr. Verduzco argued that they could not have been aware of the defective nature of the archway’s construction, as it had been built at the request of the prior property owner. The structure was constructed without building permits. Mark Burns, a civil engineer testifying for the plaintiff, said that “a reasonable property owner would have thoroughly tested the archway to ensure it was capable of withstanding such horizontal forces before allowing children to enter into the area.” Mr. Burns noted that twenty rope pulls would have been sufficient to demonstrate the structure’s instability.

    The trial court rejected Mr. Burn’s statements, finding that the respondents did not have any knowledge of the defect and that a visual inspection should have sufficed. The court noted that this a triable issue, whether visual inspection suffices, or whether the property owners should have done as Mr. Burns suggested and yank a rope twenty times. The court noted that “although a jury may ultimately disagree with Burn’s opinion, it was supported by sufficient foundation and was not speculative.”

    The opinion was written by Judge Flier, with Judges Rubin and Grimes concurring.

    Read the court’s decison…


    Homeowners Not Compelled to Arbitration in Construction Defect Lawsuit

    January 6, 2012 — CDJ Staff

    A California appeals court has ruled that developers cannot enforce CC&Rs in a case where a developer cited an arbitration clause it had inserted into the CC&R. The homeowners are alleging construction defect and wished to sue the developer who claimed a right to this under the CC&Rs.

    The Marina del Rey Argonaut reports that particular appeal dealt only with whether the developer could compel arbitration. The underlying construction defect issues will subsequently have to be determined at trial.

    The attorney for the homeowners’ association, Dan Clifford, noted that “arbitration has to be agreed to by both parties.” The covenant was drafted by the developer and in addition to requiring arbitration, it had a clause that it could not be amended without the consent of the developers. The court ruled that CC&Rs “can be enforced only by the homeowners association, the owner of a condominium or both.”

    Read the full story…


    Homebuilding on the Rise in Nation’s Capitol

    November 7, 2012 — CDJ Staff

    Is the homebuilding crunch over in DC? The Washington Post has reported that while new home construction is up throughout the country, in the DC area, construction has reached levels last seen in 2006. From January to August 2012, there were more than 19,000 building permits issued in the area, nearly doubling the number issued by that point in 2011.

    While building is on a quicker pace, what’s being built has changed. As compared to 2006, there are more townhomes, condos, and smaller homes being built. The article notes that 11 percent of new construction is condos, while in 2006, it was only 5 percent.

    Read the full story…


    Product Exclusion: The Big Reason Behind The Delay of LEED 2012

    July 10, 2012 — Douglas Reiser, Builders Counsel

    By now, you have probably heard that the USGBC has decided to delay implementation of its previously named “LEED 2012” rating system. What you might not know is exactly why this is happening. Rest assured that the decision was not made willy nilly ?Äì LEED 2012 had many industrial groups running for the hills.

    I have spent the past few weeks reading a number of articles on the backlash. LEED 2012 was intended to create a seismic shift; it was not a mere update. A strict focus on reduction of chemicals, created mass panic that a large number of material providers’ products would essentially be banned from green projects ?Äì meaning most local, state and federal projects.

    Read the full story…

    Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com


    Businesspeople to Nevada: Revoke the Construction Defect Laws

    March 1, 2012 — CDJ Staff

    The Nevada chapter of the National Federation of Independent Businesses has said that Nevada’s construction defect and minimum wage laws are hampering job growth. The organization conducted a survey, and although only about two percent of the members responded, they passed the opinions of the group on to Governor Brian Sandoval. Sandoval has said, according to the report by Fox News Reno, that he wants the state to be more business friendly. He supports reforms to Nevada’s construction defect laws, saying that he’d “like to see some reform” on the issue of mandatory attorney’s fees.

    Randi Thompson, the spokesperson for the Nevada chapter of the National Federation of Independent Businesses, said that members of her organization would like to see current Nevada construction defect law revoked. She described current law as “driven towards lawyers and not toward protecting consumers.”

    Read the full story…


    Insurer Has Duty to Defend in Water Intrusion Case

    July 10, 2012 — CDJ Staff

    The Seventh Circuit Court of Appeals has upheld a summary judgment against an insurance company in a construction defect suit. Lagestee-Mulder, Incorporated (LMI) was hired by Crown Centre to construct a multi-story office building in Franfort, Illinois. LMI hired Frontrunner Glass & Metal to supply and install windows and doors. Frontrunner purchased an insurance policy from Consolidated which named LMI as an additional insured. The project experienced water intrusion and other construction defects and Crown sued LMI. Consolidated denied coverage. LMI sued Consolidated and the US District Court granted a summary judgment against Consolidated.

    The appeals court reviewed the grounds for summary judgment and determined that under Illinois law, Consolidated had a duty to defend. The court cited an earlier opinion that “if the underlying compliant alleges facts within or potentially within policy coverage, an insurer is obligated to defend its insured even if the allegations are groundless, false, or fraudulent.”

    Read the court’s decision…


    Preparing For the Worst with Smart Books & Records

    November 7, 2012 — Douglas Reiser, Builders Counsel

    Contractors are often too caught up in keeping the wheel of business churning to recognize deficiencies in how their records are managed. Working hard and working often tend to leave little time for consideration of your documents. But all too often I see the unthinkable, a contractor gets into trouble and has to call on its surety for help. At that point, you might finally get your first dose of reality about your records ?Äì and it can cost you.

    Read the full story…

    Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com